What was the change in valuation allowance for Noodles & Company in 2022?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | |
|---|---|---|
| Deferred tax assets (liabilities): | ||
| Loss carry forwards | $ 47,555 | $ 45,547 |
| Deferred franchise revenue | 1,655 | 1,968 |
| Property, equipment and intangible assets | (14,479) | (20,473) |
| Stock-based compensation | 1,197 | 1,872 |
| Tax credit carry forwards | 10,143 | 8,744 |
| Interest expense | 3,609 | 1,935 |
| Inventory smallwares | (1,754) | (1,772) |
| Other accrued expenses | 886 | 518 |
| Operating lease assets | (42,340) | (49,138) |
| Operating lease liabilities | 51,739 | 59,611 |
| Other | 1,670 | 1,606 |
| Total net deferred tax assets | 59,881 | 50,418 |
| Valuation allowance | (60,157) | (50,673) |
| Net deferred tax liabilities | $ (276) $ | (255) |
For the year ended December 31, 2024, the Company determined that it was appropriate to maintain a valuation allowance of $60.2 million against U.S. deferred tax assets due to uncertainty regarding the realizability of future tax benefits. The previously recorded valuation allowance increased during 2023 due to increases in deferred tax assets. The valuation allowance is recorded against net deferred tax assets, ex
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the excerpt provided does not contain the specific valuation allowance for Noodles & Company in 2022. However, it does state that for the year ended December 31, 2024, the company maintained a valuation allowance of $60.2 million against U.S. deferred tax assets due to uncertainty regarding the realizability of future tax benefits. The document further notes that the previously recorded valuation allowance increased during 2023 due to increases in deferred tax assets.
For a prospective franchisee, understanding the valuation allowance and its changes over time can provide insights into the company's financial health and its expectations regarding future tax benefits. A valuation allowance indicates that the company does not expect to realize the full value of its deferred tax assets, which could be due to various factors such as past losses or uncertainties about future profitability.
To gain a clearer picture, a potential Noodles & Company franchisee should ask the franchisor for the specific valuation allowance figures for 2022 and previous years. This information, along with an explanation of the factors that influenced changes in the valuation allowance, would help in assessing the financial risks and opportunities associated with investing in a Noodles & Company franchise.